Physical Inventory

We don’t ‘wipe out’ the inventory. Instead, we scan the barcodes (UPC’s, SKU's, and EAN’s) of all the product in the store. Regardless of where it is scanned in the store, the system compiles a listing and matches the scan to the inventory. Theory says that if it’s in the store the system knows about it and will find a match.

When each ScanPal is downloaded and again once the entire inventory has been collected, the system looks at what the system has and what the scanning has for quantity’s.

We print a report for each ScanPal download immediately looking for products that are ‘not on file’. These are highlighted and someone checks them immediately.

• 10 of the same product number scanned but not found in the system/store (shows up as “not on file”); go to the sections where scanned, identify them, if known as something else in the system, make the correction (possible call for labels) or add the product to the system.
• 10 widgets in the system/store; scanned 10, everything’s a match, good.
• 10 nuggets in the system/store; scanned 5, discrepancy (of 5) – within reason, this is double checked. We can see in the system where each of the nuggets was scanned and double check those spots. (the proverbial search and destroy).

At some point the powers that be gather round the table, talk about what’s going on and make a decision to accept the scanned or collected inventory and go ahead and process the Physical Inventory to make the collected numbers the new ‘real’ numbers.

In the Physical Inventory process we replace existing quantity’s in the system with the collected numbers; for those products that the system thinks you have but none were scanned, those will be set to zero onhand.

The changes in the inventory, both increases and decreases make up the discrepancy by item.

The value of your inventory at both cost and retail is updated automatically based on the costs and retail values in the inventory record.

We would strongly encourage closing for one day or, closing early and collected the inventory after the early close. I’m somewhat reluctant to do the early close and work the staff late as they will have to be in the store the following morning. Also, people slow down when tired and their accuracy and attention to detail is reduced.

Closing also allows for complete concentration on the task at hand without distraction.

We usually gather all players together before starting and introduce ‘rules’;

• Cell phones off, (not silent or vibrate, off) I want everyone to hear the beeping of the scanners
• No headsets, I want everyone to hear the beeping of the scanners
• No music; I want everyone to hear the beeping of the scanners.
• No talking, I want everyone to hear the beeping of the scanners.
• If you start a section, finish it. Do not stop midway for pee breaks, cigarette breaks, to take a phone call… If you need to do any of those things, do so at the end of one section and before you start the next section.
• If you (Staff) are going to be leaving for any reason during the inventory, you must finish the section (or not start one), turn in the scanner you are using, and let you know they are leaving and when they are due back if coming back.
• Do not change or otherwise reorganize a section/shelf after scanning. [i]merchant tracks the sequence of the scans so that we know that the item in question is the 35^th item scanned. There will be time for (cleaning up the shelves) that after the inventory is complete.

For management;

• If providing food and drink, get that coordinated before everyone starts collecting. (pizza’s and subs are the standard) Make sure everyone is clear on when food will be arriving.
• If not providing food and drink, pick a stopping time(ish) and make sure they understand that they must be back at xxx time. Generally about an hour.
• Plan on and announce a starting time and ending time.
• Plan on break times.
• Make sure everyone is aware of those times.

If staff needs to leave before the end of the collection make sure they are asked prior to starting so that no-one is blind-sided that half the crew is leaving…

We can provide ‘tickets’ if you want them that get taped to the shelves. Essentially everything is broken into geographical areas.

• A 3-to-4 foot wide, floor to ceiling shelf is 1 ticket.
• A 3-to-4 foot wide, half height shelf is 1 ticket.
• A spinner is one ticket.
• A table top is one ticket… I think you get the drift…

These ‘tickets’ are nothing more than a reference to a location in the store; they bear no resemblance to the stores ‘Department Categories’ other than the field that is tracking the ticket number is called ‘Department Category’.

Marking the store up is relatively easy; from the entrance door, go left all the way around the sales floor back to the starting point. Repeat that but this time go in one layer of shelving. Keep working in concentric circles towards the middle of the store.

The key to this is keeping the tickets in sequential order so that if you have to go to a ticket, it is relatively easy to find…

Tickets stay in place until the inventory is completed and processed. (so we know where to go to find issues)

While out on the floor collecting (scanning) the inventory, they do not need to be collected in sequence. More so, I prefer staff keep distances between themselves so that they: don’t talk, aren’t in each other’s way, and, I want everyone to hear the beeping of the scanners.

2 or 3 carts with tickets applied should be placed strategically around the store. If something wont scan, they are pulled from the section where they were found a placed on the cart as non-scanable or non-identifiable. They will be handled manual later under the ticket number assigned to that cart.

As an aside, the tickets become an indicator for the managers to be able to look out over the sales floor and see full and half tickets and where the concentrations of full or half tickets are… basically at the beginning you’ll see a lot of full tickets. Towards the end, many half tickets… maybe you want to direct someone towards an area that everyone has been avoiding….

Scanners

There will be the scanning team and the download /managers. Scanners will have a ScanPal that they will identify the operator, the specific section they are scanning and the type of product they are scanning. They will key in the ticket number (6 digit number on the ticket) then scan starting top most point in the section, left to right, then drop down a section, left to right. Always top left to right, top to bottom. When they complete the section, initial both the top and bottom of the ticket and tear off the bottom half (leaving the top half in place). The bottom half is slid under a rubber band on the scanner and the scanner is dropped off at the download station (usually a register or PC on the floor.). they pick up an empty scanner and start over again.

The key to this is the information the person doing the downloading has all the information they need to download and correctly identify the ‘section’ the scanner has, saving the downloaded file as the ticket or section number. The person dropping of the ‘full scanner’ does not need to talk to or distract the person doing the downloading as all the information is in the ticket or the ScanPal itself.

Do not put a scanner down; they get lost. They all have lanyards or wrist straps. Use the lanyard or writs strap, do not put the scanner down.

Downloader

This person will connect each ScanPal to the download cable and trigger the scanner to download. On the PC they will tell the PC to get the file from the scanner. Both the scanner and the PC will display the number of records being transferred. When complete the operator verifies those numbers and then saves the file in the appropriate location. The file name needed is the ticket number that came in with the scanner.

A download report is run, it will show on the screen the counts of the number of records download and if there are not on files found, how many. When the report is printed, those ‘not on files’ are highlighted so that someone can go to that section (the ticket number) and find the products in question.

Corrections and spot checking

Generally the corrections and spot checking is done by someone near to the downloader as this is where the reports will be printed. If not on files are identified an d the system needs to be updated, this is normally the person that does that so it is generally relegated to someone with high knowledge levels of the store/inventory/system.

Spot checking quantity’s generally doesn’t start until the inventory is close to completion. This is because the system allows for the same product to be located in multiple areas of the store. So if the system thinks: 10 nuggets in the system/store; scanned 5 in section 123456 discrepancy (of 5) – the remaining 5 may be (legitimately) located else ware in the store and hasn’t been collected until the very end.. We can see in the system where each of the nuggets was scanned and double check those spots. (the proverbial search and destroy).

Really, once all of the data is collected do you get a more realistic feeling for the counts. I usually encourage looking at big numbers (both high and low) first. (system says we have 150, we’ve collected only 5 total) how true is this likely to be? Or vise-versa, system says we have 1 and we’ve collected 1,000….. the numbers will be off in both directions.

Within reason these discrepancies should be checked or validated with the knowledgeable staff. Once a decision is made that the collected numbers are (after corrections) mostly correct (and you are comfortable with what is being presented), then the inventory is processed.